Jeremy Hunt, the head of the Treasury, pledged to increase funding for essential public services like health and education while simultaneously imposing tax increases and spending cuts totalling 55 billion pounds ($65 billion). These promises included protecting the most vulnerable, such as pensioners and people on low incomes.
Following the announcement of unfunded tax cuts totalling 45 billion pounds ($53 billion) by former prime minister Liz Truss, which destroyed investor confidence, sent the pound to record lows against the dollar, and prompted emergency central bank intervention, the emergency budget statement sought to restore the government’s financial and political credibility.
However, when a price cap increases from 2,500 pounds to 3,000 pounds per year for the typical home in April, millions of households will see increased energy costs. The spokeswoman for the opposition Labour Party’s economic policy, Rachel Reeves, criticized the budget as including “more taxes, more inflation, and costlier mortgages.”
As the government fought to stimulate the economy and bailed out banks, the U.K. public debt increased from less than 36% of economic production in 2007 to about 83% of economic output in 2017.